Sin City's Identity Stripped by Recession

Jan. 1, 2009

Page 3 of 4

"In Las Vegas you could always get a job. A woman could take care of her children," she said, shaking the white beads of her cornrows in befuddlement. "I don't know what happened, but Vegas is really stressed out. People don't understand it and I don't either because Vegas has never been like this."

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Michael Green, a history professor at the College of Southern Nevada and a longtime resident, agrees Las Vegas has never been like this.

Previous economic dips, one in the late 1990s and another after the attacks on Sept. 11, 2001, were brief and largely confined to the tourism industry. In a very Las Vegas way, they were forgotten once the money began flowing again.

This one may be harder to forget.

This downturn already is longer and more pervasive, and it appears open-ended. It's devastated not just the tourism industry, but the state's only other major economic driver -- construction and development.

"This recession destroys the illusion of prosperity," Green says. "And I believe some of our prosperity was an illusion."

He describes Las Vegas' promise as an inversion of New York City's boast: "If you couldn't make it anywhere, you can make it here." But it has long fallen short on that deal for many.

Southern Nevada social services have struggled to keep pace with need. The state's suicide rate is twice the national rate. The city leads the country in percentage of teenage high school dropouts. It's among the highest in percentage of uninsured.

This recession is laying bare these shortcomings, Green said. There's no easy money to hide the gaps, no certainty how long the downturn will last, no clear idea what the new Las Vegas will look like.

"That creates a whole new culture here, I think," Green says, "one that I don't know that we're ready to deal with."

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When times were good, the buzz of a booming Las Vegas was a siren song for all types. Retirees, young families, Californians lured by low-taxes, East Coast natives lured by high temperatures. For years, Las Vegas sat near the top of lists of fastest growing cities.

Growth was a dinner party topic. Did you see that new shopping center opened? Have you been to the new casino?

Each opening came with jobs. Word traveled.

It went all the way to Atlantic City, once a Las Vegas rival, where a couple of card dealers, Donald "Butch" Youshaw and his girlfriend, Bernie Jones, heard the call.

"Come out West. Get a job, they're booming, they're hiring," they remember being told. "Casinos are going up, the housing market is going up."

In 2002, the couple drove across the country, towing his classic Mercedes Benz. Youshaw, along with his mother, a retired nurse, bought a three-bedroom stucco home. It had a fig tree in back and no stairs -- good for his sister, who uses a wheelchair and was expected to join them.

But casino jobs were harder to get than he anticipated. "It's all about who you know," he said. He knew no one.

Still, others seemed to be soaring. His neighbor was gobbling up investment properties as home values headed north. Youshaw imagined he might try his hand at real estate, but first he needed money to spruce up the home he already owned.

His mother saw an ad on television for a refinancing program. She called the number and got a new loan with ease and little clear explanation.

But the loan came with hidden fees and higher monthly payments, and Youshaw fell $25,000 in arrears before the bank foreclosed.